Back in the 1950s, cities emptied out as a car and a backyard came to exemplify the American dream.  In succeeding decades, McMansions took root in exurbs, as homeowners sought more and more house on more and more land. According to Leinberger, demand for this type of housing has collapsed and will not recover, due to generational shifts. Baby Boomers (born from 1946-64), are retiring at exactly the same time as Millenials (born from 1979-96) are ready to strike out on their own; neither group is looking for a large house in outer suburbia. Boomers are downsizing from their suburban homes, and Millenials tend to favor urban environments, both for the cultural attractions and the convenience of not needing a car.

Leinberger cites Pasadena, CA and Bellevue, WA as examples where mixed-use developments with good public transit access have been built where strip malls once stood. He also calls for greater public investment in bus and light-rail systems, bike lanes, and pedestrian walkways. His suggestions would provide jobs and help the environment, both of which the U.S. could really use.

For those of us living in Montclair, Maplewood or South Orange, we are fortunate to have much of this infrastructure already in place.  For those who are not, would you give up your 2 acres for a smaller lot and a shorter commute?  Would you trade your Olive Garden for Osteria Giotto? How about your Multiplex for the Wellmont Theatre?

The Washington Post reports that rates for a 30-year, 20%-down fixed-rate mortgage are the lowest they have ever been since Freddie Mac started following rate changes in 1971. As of last Friday, 6/25, the average rate is  4.69%, down from 4.75% the week before and more than 5% a year ago. Rates for a 15-year, fixed-rate mortgage have gone even lower, as low as 3.875% (compared to 4.89% last year).

The Post explains that mortgage rates are dropping

because investors, nervous about global economic stability and a volatile stock market, are plowing their money into mortgage securities backed by Fannie Mae and Freddie Mac, assets that investors perceive to be relatively safe bets.

But despite the great terms, consumers are becoming less and less interested in buying houses and applying for mortgages. The end of the tax credit in April combined with shaky employment and stagnating wages have led to a steep drop in home sales, and a corresponding decrease in mortgage applications. While some people are still in the market to buy a home, the numbers are reduced and the lower mortgage rates are not working to attract those on the fence. Michael Fratantoni, a vice president at the Mortgage Bankers Association, says that consumers at this point are used to fairly low mortgage rates, and do not therefore see the 4.69% rate as a reason to commit to a mortgage if they are not otherwise prepared to.

However, for those who already have mortgages, now is an excellent time to refinance, and indeed, refinancers make up a whopping two-thirds of all mortgage activity. For those who can, refinancing is a great option, but not everyone who wants to will be able to, given that house prices have dropped and their own credit history might not fit the more stringent qualifications mortgage lenders have adopted since the subprime mortgage crisis.

On the other hand, it’s very difficult to walk to the train station, or the corner store to get milk in a town that is laid out in a branching street pattern with a series of dead-ends -aka cul-de-sacs- feeding in to a main artery. In these configurations, you can be a stone’s throw from your destination, but have to travel a mile to get there.  This may be a satisfactory layout for the car but not for the pedestrian or bike rider.

Watch this very clever video from the Congress for New Urbanism and you’ll see what I mean…

httpv://www.youtube.com/watch?v=VGJt_YXIoJI